Marketing Strategy

Hierarchy of goals and objectives

Organizational Goals and Objectives Marketing Goals and Objectives Marketing Mix Goals and Objectives Marketing Mix Element Goals and Objectives

Marketing Strategy

What business are you in?

Mission statement Statement of marketing strategy Indicates product, market scope Shows growth factor Shows differential advantage Shows management orientation

Marketing Strategy

Elements of Objectives
An effect
Benchmark + effect = Desired Outcome Effect has to be measureable Should be realistic

Timeframe for evaluation Evaluation and effect should be related

Marketing Strategy

Marketing Strategy Development

Recognize and evaluate an opportunity Market size and potential Key competitors Choose target market Develop Objectives for each opportunity Develop Marketing Mix Strategy for each opportunity Choose Marketing mix elements

Marketing Strategy

Opportunity Evaluation
Review of the Rule of 3 Review of Requirements for Market Size Review of Relevant Competitive Set

Marketing Strategy

Target Market Selection

Introduction to Market Segmentation Review of the Strategic Options Equivalent Behaviors as the Critical Variable

Marketing Strategy

Structure of Marketing Mix Strategies

Are all Mix elements equally important? Product as the key Example using Product Life Cycle

Marketing Strategy
Generic Marketing Strategies Cost Leadership
Lower costs of production and distribution

Product Differentiation
Unique product or brand

Focus
Focus on customer needs in a few segments

Marketing Strategy

Product Strategies
Product Mix Strategies
Market penetration versus market skimming

High Quality Medium

Premium Goods OverPricing Hit and Run High

Penetration Average Quality Shoddy Goods Medium Price

Super Bargain Bargain

Low

Cheap Goods Low

Marketing Strategy

Product Strategies
Product Market Growth Strategies

Old

Market Penetration Product Development

(increase usage) (new uses)

Markets

New

Market Development
(new users)

Diversification
(new users, new uses)

Old

New

Products

Marketing Strategy

Product Strategies
Boston Consulting Group Strategy:
Relative Market Share Market Growth Rate Problems with BCG Approach Difficult to estimate relative market share in rapidly growing markets

Marketing Strategy
BCG Matrix:

22%

Stars
Some cash use Future cash cow Market Growth Rate 10%

?
High cash use ? Is to build or not

Cash Cows
Generate cash for ?, Stars 0% 10x

Dogs
Low or no cash use When to divest

1.5x Relative Market Share

.1x

(log scale)

Marketing Strategy

Market Position Strategies

Market Follower Strategies
Conscious Parallelism Similar products, prices Avoid unprofitable segments Market Niche Specialize in a very small group of customers Concentrated segmentation strategy

Marketing Strategy

Market Position Strategies

Market Leader Strategies
Increase Size of Total Market Product-Market Growth Strategies Protect Market Share

Fortification

Assortment of brands, sizes

Innovation

Best defense is a good offense

Counteroffensive

Increase Market Share

BCG Antitrust constraints

Marketing Strategy

Market Position Strategies

Market Challenger Strategies
Frontal Attack Out-innovate leader Tough to do, easier to defend Flanking/Bypass Attack Attack where leader is not looking Find a new market segment Price Discount Strategy

Buyers are sensitive to price

Works if leader does not cut price Cheaper Goods Strategy Lower quality but much lower price Vulnerable to still cheaper goods Prestige Goods Strategy Increase both quality and price

Marketing Strategy
Market Challenger Strategies (cont.)
Cheaper Goods Strategy Lower quality but much lower price Vulnerable to still cheaper goods Prestige Goods Strategy Increase both quality and price

Marketing Strategy

Encirclement Flanking Defense

Preemptive Defense

Attacker
(smaller)

Frontal

Defender
(bigger)

Contraction Defense

Attack Counteroffensive Guerilla Attack

Position Defense

Mobile Defense Flank Attack

Bypass

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Next time MARKETING STRATEGY CASE For Barco Projection, please prepare, by team, the case discussion for class on 2/12. The deadline for receipt of the PowerPoint presentation is noon 2/12. Market Segmentation Please read chapter 6